• No results found

Global talent management and the role of social networks

N/A
N/A
Protected

Academic year: 2021

Share "Global talent management and the role of social networks"

Copied!
114
0
0

Bezig met laden.... (Bekijk nu de volledige tekst)

Hele tekst

(1)

Global talent management and the role of social networks

Master Thesis

Business Administration

Track: International Management School of Management and Governance University of Twente

P.O. Box 217 7500 AE Enschede The Netherlands

Author

Lena Dresselhaus Bodelschwinghstr. 5 48496 Hopsten-Schale Germany

E-Mail: l.dresselhaus@student.utwente.nl Student number: s0205613

Supervisory committee

Dr. H.J.M. Ruël Dr. T.V. Bondarouk l

(2)

Page 2 Master Thesis – Lena Dresselhaus

Preface

With this thesis, I finalize my Master of Science in Business Administration at the University of Twente. This Master thesis is the result of an extensive literature review and an interesting, new research methodology, namely the Delphi method, in order to investigate global talent management and the role of social networks.

I would like to express my gratitude to all the people who helped me in one way or another in the completion of my Master of Science.

First of all, I thank my supervisor Dr. Huub Ruël for his support. Throughout the whole process, he has given me a lot of freedom to work on my thesis. His knowledge, professionalism, interest in research, contacts and guidance has helped me to complete this study. Furthermore, I like to thank my co-supervisor Dr. Tanya Bondarouk for her assistance, especially for participating in my methodology part.

Besides, I like to take this opportunity to give thanks to all the participants in the Delphi methodology. Without their attendance and feedbacks, it would not have been possible to finish this research and come to the achieved conclusions and recommendations.

Also, I would like to express my gratitude to my family, my friends and fellow students for their unconditional support and patience, but also for their time and encouragements to keep me motivated.

Finally, I would like to communicate my sincere thanks to the proofreaders who gave me meaningful, honest and helpful feedbacks and criticisms.

Lena Dresselhaus

Enschede, December 2010

(3)

Page 3 Master Thesis – Lena Dresselhaus

Executive summary

Purpose of the research

The purpose of this Master thesis is to contribute to the knowledge about global talent management (GTM) and the role of social networks. Current challenges and circumstances are responsible for the need of GTM within multinational corporations (MNCs). Elements, instruments as well as core objectives will be elaborated with this study. This will be achieved with the help of different expert groups. The goal of this research is to create a GTM model including social networks that intends to support MNCs on the implementation phase. In order to accomplish the research objectives, the following research question will be answered: How can social networks support MNCs in their GTM?

Design methodology

This research makes use of the Delphi method. This is especially a successful approach for exploring new concepts, like GTM and the role of social networks. Four principal characteristics can be determined for this technique: anonymity of Delphi participants, iteration, controlled feedback, and statistical aggregation of group response (Rowe & Wright, 1999). With the help of questionnaires, opinions of different expert groups (HR managers, HR researchers and Master students) will be collected in two rounds in order to answer the research questions.

Findings

The findings of the research result in differences and similarities among the three expert groups.

They all assessed the necessity of GTM in MNCs. The HR managers and HR researchers scored the same elements and instruments which have to be implemented in a successful GTM system. But concerning the application of social networks, the participants have different views. Especially the Master students are open-minded about social networks and therefore, they advocate the use of this tool. The HR managers, however, are sceptical towards this new media and did not integrate social networks in GTM to a great extent until today.

Conclusions

A combination of the literature review and the findings of the questionnaires lead to a suitable GTM model for MNCs. Accordingly, the GTM model will comprise six elements, namely selection, identification, attraction, development, retention and motivation. With the application of the instruments “on the job training”, “cooperation with universities”, “off the job training” and “talent- oriented career model” the organizational goals should be achieved. These goals are performance improvement, but also employee satisfaction and employer branding. Social networks function as a tool for the different instruments in order to fulfill the GTM elements and to achieve the GTM goals.

(4)

Page 4 Master Thesis – Lena Dresselhaus Recommendations

Recommendations can be given for the three participating expert groups. The Master students represent an essential target group of GTM. Thus, they have to be integrated in the process of GTM implementation in MNCs. They should always express their opinions and requirements towards their workplace. Besides, they are the people who grew up with social media and therefore, it should be their task to convince HR managers of the usability of social networks in GTM. The HR researchers already investigated this new HR issue, but they are just at the beginning of development. As a consequence, they should continue to focus on GTM and the role of social networks and also try to convince the HR managers of the effectiveness of this topic by conducting more research. The HR managers realized the importance of GTM in their MNCs, but they have to spend more time, more money and more effort into this HR topic as it reflects an essential opportunity for their organization.

Besides, they should focus more on social networks, never mind that it does not belong to their daily routine. GTM and social networks are great tasks for them, but HR managers have to accept this challenge. It would be advisable to visit seminars and read more articles and books about GTM and social networks to gain more information. It is important that the HR managers are positive about this HR issue in order to implement a successful GTM model including the tool social networks.

Limitations

Limitations of this research can be outlined in form of the reliability. As the Delphi method represents an approach that only concentrates on a small number of participants, it is difficult to state that the results are applicable to any other MNC. Besides, the participation of the experts poses an obstacle. It is a great challenge to find enough participants of each expert group in order to accomplish this new methodology.

Future research

As GTM and the role of social networks is a relatively new HR topic, it is difficult to compare new findings with old findings. But as it is still an important issue to investigate, more and more research will be done in this research field and therefore, it will be possible to compare the findings in order to go more into detail. An interesting topic, resultant from this research, is the testing of GTM elements and instruments in practice. Therefore, theses aspects should be monitored in an MNC. It would also be attractive to focus on the measurement and best implementation forms of these components in future research. Besides, as lots of previous researches are considering Asian MNCs, it would be an important task of future research to investigate GTM and the role of social networks in European or American MNCs.

(5)

Page 5 Master Thesis – Lena Dresselhaus

Table of contents

PREFACE... 2

EXECUTIVE SUMMARY ... 3

TABLE OF CONTENTS... 5

LIST OF ABBREVIATIONS ... 7

LIST OF TABLES... 8

LIST OF FIGURES... 8

1. INTRODUCTION... 9

1.1BACKGROUND... 9

1.1.1 Trends in economy and society ... 9

1.1.2 Trends in HRM ... 9

1.2OBJECTIVES... 12

1.3RESEARCH QUESTION... 12

1.4RESEARCH STRATEGY... 13

2. LITERATURE REVIEW ... 14

2.1MULTINATIONAL CORPORATIONS... 14

2.1.1 Definition of MNCs ... 14

2.1.2 Ranking list of MNCs ... 16

2.1.3 Advantages and disadvantages of MNCs ... 18

2.1.4 Definition of MNCs for this research ... 18

2.2GLOBAL TALENT MANAGEMENT... 19

2.2.1 Definition of Talent ... 19

2.2.2 Definition of GTM... 21

2.2.3 Target groups and persons responsible of GTM ... 28

2.2.4 Definition of GTM for this research... 29

2.3SOCIAL NETWORKS... 29

2.3.1 Introduction ... 29

2.3.2 Definition of social networks ... 31

2.3.3 Functions of social networks... 33

2.3.4 Advantages and disadvantages of social networks ... 33

2.3.5 Definition of social networks for this research... 34

2.4.RESEARCH MODEL... 34

3. METHODOLOGY ... 38

3.1INTRODUCTION... 38

3.2QUESTIONNAIRE... 39

3.3SAMPLE... 40

3.4DATA PROCESSING AND ANALYSIS... 41

4. FINDINGS ... 42

4.1INTRODUCTION... 42

4.2FINDINGS MASTER STUDENTS... 42

4.3FINDINGS HR RESEARCHERS... 43

4.4FINDINGS HR MANAGERS... 44

4.5COMPARISON OF FINDINGS... 46

5. CONCLUSIONS AND RECOMMENDATIONS ... 53

5.1CONCLUSIONS... 53

5.2RECOMMENDATIONS... 59

5.3LIMITATIONS... 60

(6)

Page 6 Master Thesis – Lena Dresselhaus

5.4FUTURE RESEARCH... 62

5.5REFLECTION... 63

APPENDIX ... 67

APPENDIX 1:FIRST QUESTIONNAIRE HR MANAGERS... 67

APPENDIX 2:FIRST QUESTIONNAIRE HR RESEARCHERS... 74

APPENDIX 3:FIRST QUESTIONNAIRE MASTER STUDENTS... 79

APPENDIX 4:COVER LETTER HR MANAGERS... 83

APPENDIX 5:SECOND QUESTIONNAIRE HR MANAGERS... 84

APPENDIX 6:SECOND QUESTIONNAIRE HR RESEARCHERS... 95

APPENDIX 7:SECOND QUESTIONNAIRE MASTER STUDENTS... 106

(7)

Page 7 Master Thesis – Lena Dresselhaus

List of abbreviations

al. alterii

AT&T American Telephone & Telegraph BP British Petrolium

CeBIT Centrum für Büroautomation, Informationstechnologie und Telekommunikation CEO Chief Executive Officer

e.g. exempli gratia

e-HRM electronic Human Resource Management ENI Ente Nazionale Idrocarburi

etc. et cetera

FDI Foreign Direct Investments Fig. Figure

GDF Gaz de France

GTM Global Talent Management HR Human Resource(s)

HRM Human Resource Management

HSBC Hongkong and Shanghai Banking Corporation ICBC Industrial and Commercial Bank of China Inc. Incorporation

ING Internationale Nederlanden Groep IT Information Technology

JP John Pierpont Ltd. Limited

MNC Multinational Corporation

p. page

pp. pages

R Round

SPSS Statistical Package for the Social Sciences TM Talent management

UK United Kingdom US United States Vol. Volume VZ Verzeichnis

(8)

Page 8 Master Thesis – Lena Dresselhaus

List of tables

Table 1 The old and the new business realities Page 11

Table 2 The Global 2000 Page 17

Table 3 Social networking site users in selected countries Page 30

Table 4 Findings HR challenges Page 47

Table 5 Findings TM elements Page 47

Table 6 Findings TM instruments Page 48

Table 7 Findings TM goals Page 48

Table 8 Findings future social media usage Page 49 Table 9 Findings suitability social networks Page 50 Table 10 Findings reasons for social networks Page 50 Table 11 Findings future role of social media Page 51 Table 12 Findings requirements of future employees Page 52

List of figures

Fig. 1 International strategy alternatives Page 15

Fig. 2 Global organizational modes Page 15

Fig. 3 Elements of talent Page 20

Fig. 4 TM as an overarching key process of HRM Page 22

Fig. 5 Key elements of TM Page 24

Fig. 6 The elements of TM Page 25

Fig. 7 Organizational support for social networks Page 31

Fig. 8 Elements of social networks Page 32

Fig. 9 General research model Page 35

Fig. 10 Advanced research model Page 36

Fig. 11 Two round Delphi process Page 39

Fig. 12 Global talent management model Page 58

(9)

Page 9 Master Thesis – Lena Dresselhaus

1. Introduction

1.1 Background

Today MNCs, which operate in different countries, are confronted with more and more different challenges in order to remain competitive advantage. Both general trends in economy and society as well as specialized trends in human resource management (HRM) play a decisive role for MNCs.

1.1.1 Trends in economy and society

General trends characterize today’s environment of MNCs. The first great challenge is globalization.

Globalization involves more change, more trade, more competition, more customers as well as more employees and workers. According to Schuler & Jackson (2009), “competition has never been this intense and so multifaceted: it is fast developing, fast moving, very complex, extremely widespread, and unlikely to change in dramatic ways in the near future”. The markets are opened worldwide.

Global division of labour is a main element of globalization and focuses not only on production, but also on development and administration as well as lower process costs (Lurse, 2005).

Another crucial aspect is the demographic development around the world. It is remarkable that the populations of developing economies and emerging economies are expanding and getting younger.

In developed economies, however, the populations remain stable or even shrink. As a result, these major variations concerning age and region have to be considered by MNCs as they operate in different countries (Schuler & Jackson, 2009).

Furthermore, technological change is of great importance. Technology advances rapidly and innovations are necessary to survive in the organizational environment. Consequently, learning and development are key features of MNCs (Lurse, 2005).

Finally, mergers and acquisitions are also common tasks of MNCs. They strive to observe competitors and think about cooperation in order to be more competitive in a fast-moving environment (Lurse, 2005).

1.1.2 Trends in HRM

Certainly, there are also specialized trends in HRM. Due to the trends in economy and society, it is possible to generate trends in HRM.

The need for workers and employees with competencies and motivation presents a very vital challenge. It seems that increased competencies are needed for skilled jobs and this can be

(10)

Page 10 Master Thesis – Lena Dresselhaus associated with all kinds of jobs around the world. Besides, all employees can be regarded as requiring more knowledge than ever before, so-called knowledge workers. Although the need of increased competencies is quite essential, at the same time MNCs are confronted with a scarce employment market with only few people who possess these required competencies which thus presents a difficult challenge to manage (Schuler & Jackson, 2009).

Technology leadership means cost leadership. As the workforce becomes older, lifelong learning is nowadays also a basic element in remaining competitive today (Lurse, 2005). This can also be linked with the importance of the emotional well-being of employees which is more relevant than ever before. The expectation of staying with one company until retirement is no longer significant.

Instead, staff prefers family considerations and life outside of the work environment (Boston Consulting Group, 2008).

In addition to this, the international HRM is becoming more significant. So far, the authority of HRM often remains in the home country. But MNCs have to assess and implement an international HRM system. This means that leadership systems, junior employee development, management rewards as well as management development should be coordinated and steered internationally (Lurse, 2005).

Due to these changes brought about by increased competition, new technologies, a high degree of globalization, demographic change as well as the rise of the knowledge workers, every company has to react to these developments in order to remain competitive (Guthridge, Komm & Lawson, 2008).

As people play one of the most decisive parts of a company, it is evident that MNCs should use this resource to achieve a competitive advantage. Fast moving technology, like social networks, and innovations could prove to kinds of support for MNCs in focusing on their employees. These social networks, in general, can be defined as a system of social interactions between different actors (Koch et al., 2007).

In the late 1990s, the “war for talent” started an enormous discussion on a TM system. At the time, organizations were concerned with problems in attracting and retaining talented people (Armstrong, 2006). Besides, Michaels et al. (2001) argue that this war for talent has created a new business reality.

(11)

Page 11 Master Thesis – Lena Dresselhaus The old business reality The new business reality

People need companies Companies need people Machines, capital and geography

are the competitive advantage Talented people

are the competitive advantage Better talent makes some difference Better talent makes a huge difference

Jobs are scarce Talented people are scarce

Employees are loyal

and jobs are secure People are mobile and their commitment is short term People accept the standard

package they are offered

People demand much more Table 1: The old and the new business realities (Michaels et al., 2001)

These are the major motivations for researching into GTM and the role of social networks. GTM is a cutting edge subject and will be the subject of more and more investigations in the near future. It is a great challenge to combine existing literature with my own ideas in order to design an applicable model of GTM and the role of social networks for MNCs.

In addition to this, Heyse & Ortmann (2008) explain the necessity of TM under different aspects. In their opinion, HRM has special requirements on the one hand, but on the other hand, it is different in practice. For example, the need for highly-skilled employees and persons of high potential is increasing in companies, but they are spending too little time in retaining own talents. Furthermore, they need the skill of being able to identify and develop competencies and talents, but many organizations are not aware of the criteria required to implement this need. Besides, HRM has traditionally included administrative tasks, but now and in future, it will need to focus on its strategic orientation. Moreover, HRM sees the necessity of a holistic and cross-linked approach, but in practice decentralization and fragmentation of TM is a decisive factor. All in all, it is important to realize that TM is a very important and sustainable element of HRM (Heyse & Ortmann, 2008).

Organizations struggle to attract and retain talented people. As a consequence of this, and on the basis of the new business reality, it is evident that TM is very important today and that companies have to focus more on that topic. Schuler & Jackson (2009) also agree with the opinion that MNCs can achieve a global competitive advantage by making use of GTM. To their mind, it is important to have the right people with the right competencies and motivation at the right time and in the right location. Therefore, companies need to know the main drivers and HR actions that help them succeed. But companies always have to take care to create TM that is appropriate for the 21st century (Cappelli, 2008). In these times in particular, characterized by a financial crisis, the strategic issue of attracting, developing, motivating and retaining talent constitutes one opportunity for

(12)

Page 12 Master Thesis – Lena Dresselhaus surviving this crisis and assists companies in their eventual recovery (Beechler & Woodward, 2009).

In this case, social networks could play a decisive part because more and more people are making use of networking communities and using them to find jobs and establish contacts (Murchu et al., 2004).

1.2 Objectives

According to the Boston Consulting Group (2008), people are more important than ever to organizational success. Consequently, HRM is an essential part of an MNC and these organizations have to focus more on this aspect of their company, especially on TM.

This research aims to add to our knowledge about GTM and the role of social networks. It will explain the today’s challenges for GTM as well as the characteristics like elements and instruments of a GTM system including their core objectives. As a result, different views will be presented and used in order to generate a general, acceptable GTM model: the view of the companies in form of HR managers, the position of potential employees in form of students as well as the view of theoreticians in form of HR researchers will be integrated. The established model will demonstrate the structure of a GTM system and the possibility of social media usage considering those elements. Furthermore, it is the intention of this research to look at the current and future situation of social media usage towards GTM. As future employees in form of Master students play a decisive target group of TM, it is also important to integrate them as well as their requirements in a GTM system in order to represent a successful MNC.

1.3 Research question

The previous explanations about GTM and technology in form of social networks lead to the following main research question:

How can social networks support MNCs in their global talent management?

The following further research questions will be used to answer the leading question mentioned above.

What are the main elements, main instruments and the core objectives of a successful GTM?

To what extent do social networks play a role in a successful GTM?

To what extent do MNCs already use GTM systems now and how will they use GTM in future?

How can future employees be integrated in the GTM process of an MNC?

(13)

Page 13 Master Thesis – Lena Dresselhaus 1.4 Research strategy

This research strategy follows both a descriptive approach and an exploratory approach. It is descriptive as it intends to specify the main characteristics, challenges and objectives of GTM and at the same time, it is exploratory in that it intends to design a new model concerning the MNC’s use of social networks in GTM.

The literature review defines the keywords of the main research question, namely MNCs, GTM and social networks and explores the constructs to arrive at a first research framework. In the next stept, the research methodology will be explained. The Delphi method as a new technique will be introduced to recipients of this Master thesis and its usefulness for future researches will be outlined. Primary data will be then collected in order to receive the necessary knowledge for answering the research questions. Simultaneously, it is the purpose to meet the research objectives.

The collected data will be analyzed and discussed in the subsequent section before coming to the conclusions of this research.

(14)

Page 14 Master Thesis – Lena Dresselhaus

2. Literature Review

2.1 Multinational corporations 2.1.1 Definition of MNCs

A clear definition of an MNC is given by the Business Dictionary. This dictionary defines an MNC as an

“enterprise operating in several countries but managed from one (home) country”. Generally, it is said that an MNC reflects any firm or group that attains a quarter of its revenue from operations outside of its home country (Business Dictionary, 2010).

Investopedia (2010) defines an MNC as “a corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. Very large multinationals have budgets that exceed those of many small countries.”

This dictionary also states that this term is sometimes referred to as a transnational corporation.

Investopedia also explains that nearly all major MNCs are American, Japanese or Western European.

On the one hand, advocates of these corporations say that MNCs create jobs and wealth and improve technology in countries that are in need of such development. On the other hand, critics of MNCs say that these companies can have excessive political influence over governments; they can exploit developing nations as well as create job losses in their home countries.

Ball et al. (2008) mention that an MNC has been defined as a holding company with different overseas operations. Each individual market has the opportunity to adapt its own products and marketing strategy based on the decision of the local managers. Ball et al. (2008) differentiate three different terms in international business. A multinational corporation, respectively a multidomestic corporation, “is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences”. A global company is an “an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.” An international company is a global or a multidomestic company.

To integrate the term multinational corporation, it is advisable to distinguish different global organizational types, namely global, transnational, international and multinational companies. It is important to focus on the varying activities. The following table shows the degree of each type of organization considering local responsiveness and cost reduction.

(15)

Page 15 Master Thesis – Lena Dresselhaus Fig. 1: International strategy alternatives (Bartlett & Ghoshal, 2000)

The developed typology of Bartlett & Ghoshal (2000) discerns different developing strategies, different designs of organizational structure as well as different ways of managing operations of companies with activities which take place outside the domestic market.

Fig. 2: Global organizational modes (Martin & Beaman, 2009)

Multinational companies

Multinational companies do foreign direct investments (FDI), but only in a limited number of countries. They do not intend to homogenize their product offering as they focus much more on being available for local preferences. These companies are highly decentralized – all authority, power, control and operations remain in the local business units, with the exception of consolidation of finances.

Global Transnational

International Multinational

Focus on Local Responsiveness

Focus on Cost Reduction

Multinational

Highly decentralized and locally responsive

Global

Highly centralized, focused on efficiency

International

Centralized, focused on learning &

sharing

Transnational

Locally responsive, highly efficient, learning and sharing

(16)

Page 16 Master Thesis – Lena Dresselhaus Global companies

Global companies are the opposite to MNCs. They have a high degree of centralization of all their power, control and operations. The centralization of the HR technology organization supports fast communication of new initiatives and innovations to all the employees. Furthermore, these companies have investments in many countries, but keep a strong headquarters in their home country. Their focus is on economies of scale so that they homogenize products as much as the market will allow in order to keep costs low.

International companies

International companies intend to create a balance between centralization and decentralization.

They make their products and services only in their home country and have no FDI. Further, they have no staff, no warehouses, or sales offices in foreign countries. They are only exporters and importers.

Transnational companies

Transnational companies, so-called hybrid organizational mode, are very complex organizations that have gained a high degree of importance for modern and innovative companies. They invest in many different countries and may have a global headquarters, but they also distribute decision-making power to various national headquarters and relinquish research and development activities for different national markets (Martin & Beaman, 2009).

2.1.2 Ranking list of MNCs

Forbes, an American publishing and media company, publishes different magazines including many lists. One of these lists is the Forbes Global 2000 list which enumerates the world’s biggest companies. Therefore, the largest MNCs include corporations like General Electric (conglomerates), oil companies like Royal Dutch Shell, ExxonMobil or BP, car manufacturers like Toyota Motor or banks like ING Group (Forbes, 2010). To provide an overview of the most definitive MNCs, the current list can be found in the following table.

(17)

Page 17 Master Thesis – Lena Dresselhaus Table 2: The Global 2000 (Forbes, 2010)

Rank Company Country Industry Sales ($bil.)

Profits ($bil)

Assets ($bil)

Market Value ($bil) 1 General

Electric United States Conglomerates 182.52 17.41 797.77 89.87

2 Royal Dutch Shell

Netherlands Oil & Gas Operations

458.36 26.28 278.44 135.10

3 Toyota Motor Japan Consumer Durables 263.42 17.21

324.98 102.35 4 ExxonMobil United States Oil & Gas

Operations 425.70 45.22 228.05 335.54

5 BP United

Kingdom Oil & Gas

Operations 361.14 21.16 228.24 119.70

6 HSBC

Holdings United

Kingdom Banking 142.05 5.73 2,520.45 85.04

7 AT&T United States Telecommunications

Services 124.03 12.87 265.25 140.08

8 Wal-Mart

Stores United States Retailing 405.61 13.40 163.43 193.15

9 Banco

Santander Spain Banking 96.23 13.25 1,318.86 49.75

10 Chevron United States Oil & Gas Operations

255.11 23.93 161.17 121.70

11 Total France Oil & Gas

Operations 223.15 14.74 164.66 112.90

12 ICBC China Banking 53.60 11.16 1,188.08 170.83

13 Gazprom Russia Oil & Gas

Operations 97.29 26.78 276.81 74.55

14 PetroChina China Oil & Gas

Operations 114.32 19.94 145.14 270.56

15 Volkswagen

Group Germany Consumer Durables 158.40 6.52 244.05 75.18

16 JPMorgan

Chase United States Banking 101.49 3.70 2,175.05 85.87

17 GDF Suez France Utilities 115.59 9.05 232.71 70.46

18 ENI Italy Oil & Gas

Operations

158.32 12.91 139.80 80.68 19 Berkshire

Hathaway United States Diversified

Financials 107.79 4.99 267.40 122.11

20 Vodafone United

Kingdom Telecommunications

Services 70.39 13.30 252.08 93.66

(18)

Page 18 Master Thesis – Lena Dresselhaus 2.1.3 Advantages and disadvantages of MNCs

Subsequently, it can be maintained that an MNC is a business organisation that has its headquarters in one country, but this company has also operations in a range of different countries. But why do many companies decide to expand into different countries? Companies have different reasons to establish an MNC and to go abroad. According to Root (1998), there are five different motivations for companies to internationalize. Firstly, companies operate in a stagnant home market. Secondly, they observe a fast growing foreign market and want to participate in this development. Thirdly, the company’s customers go international. Thus, they want to adapt to this situation and follow their customers. Fourthly, it could be a reaction to new competitors on the home market. In fifth place and the most dominant aspect is the expectation of greater sales volume and/or lower overhead costs per unit (Root, 1998).

Firms that decide to expand are often large organizations. Their size often reflects a considerable power and influence and thus, there is much criticism. Negative effects of MNCs can be summarized as follows: Often employment might not be as extensive as hoped – many jobs might go to skilled workers from other countries rather than to the domestic workers. Sometimes, MNCs may be

“footloose”; that means they might locate in a country to gain the tax or grant advantages but then these companies move away when these run out. Also pollution and environmental damages could play a negative role of MNCs. In comparison to local firms, MNCs often do not have an institutional and cultural insight of the foreign country or already established customer and supply chain relations. Consequently, going abroad involves a high risk (Gooderham & Nordhaug, 2003).

But to outweigh all these criticisms, the literature presents many advantages of MNCs. The most substantial advantage is the economic growth and employment an MNC offers and brings into the new country. Each MNC must possess some unique strategic capability in the form of technological expertise or marketing competencies. MNCs could bring skills, new production techniques and improvements in the quality of human capital. Another benefit is the availability of goods and services in the host country. In addition to this, tax revenues and improvements in the infrastructure can also be decisive conveniences for the countries (Gooderham & Nordhaug, 2003).

2.1.4 Definition of MNCs for this research

According to the previous literature review, it is obvious that there are many different definitions of an MNC and people tend to confuse different terms of international business. As a consequence for this thesis, the following clear definition will be used.

(19)

Page 19 Master Thesis – Lena Dresselhaus An MNC is a company that operates in different countries. These organizations make use of a decentralized structure and consequently, all control, authority, power and operations remain in the local businesses.

2.2 Global Talent Management

According to literature, it is difficult to identify a precise meaning of “talent” and the term “GTM”

itself (Lewis & Heckman, 2006). Nevertheless, the following pages will summarize the most academic and used definitions.

2.2.1 Definition of Talent

The historical starting point of TM was the year 1998 when McKinsey & Company, America’s largest and most renowned management consulting company, published their eminent report declaring that

“better talent is worth fighting for”. They make use of research that was based on a year-long survey of 77 large US companies in a variety of industries and 6,000 executives, complemented by case studies of 20 companies widely regarded as being rich in talent (Chambers et al., 1998). According to McKinsey, talent is “the sum of a person’s abilities… his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgement, attitude, character and drive. It also includes his or her ability to learn and grow” (Michaels et al., 2001).

Another definition of talent was developed by Mäkelä et al. (2010) who argue that most major MNCs define talent as “those employees who are high performing and continuously improving within their current position… are mobile and have the potential and the willingness for further growth in other key positions”. According to this, talented employees have to demonstrate two qualities: current high performance and future potential.

David Ulrich uses a holistic approach to talent. To his mind, talent equals competence times commitment times contribution. Ulrich (2006) determines these three as follows: Competence means that employees have the ability to do today’s and tomorrow’s tasks. Commitment means that employees are willing to give their discretionary energy to the firm’s success. Contribution means that employees are making a real contribution through their work. Furthermore, Ulrich (2006) states that “organizations are the universal setting in today’s environment where individuals find abundance in their lives through their work”. They intend to achieve that their investment of time represents to be meaningful. Ulrich’s talent equation presents a multiplicative one instead of an additive. If one of the three terms is missing, the other two will not replace it. Correspondingly,

(20)

Page 20 Master Thesis – Lena Dresselhaus

“talented employees must have skills, wills and purposes; they must be capable, committed and contributing” (Ulrich, 2006).

Compliant with Wellins et al. (2006), there is no clear definition of the term “talent”. Talent consists of different components: knowledge, skills, personal attributes and career experience. Many companies only have one definition of talent for every hierarchy, but to these authors it is necessary to distinguish the hierarchical levels and target positions. The different elements of talent can be seen in the following illustration. Knowledge comprises factors like educational achievement and advanced training. Skills involve special talents or selling skills of the person. Personal attributes are factors like motivation, risk affinity and features. Career experiences contain aspects like the field of action, projects or former employer. Consequently, it is quite difficult to determine one definition of talent.

Fig. 3: Elements of talent (Winkler, 2009) Career experience - field of action - projects

- former employer

Skills

- special talents - selling skills Personal attributes

- motivation - risk affinity - features

Knowledge - educational achievement - training

(21)

Page 21 Master Thesis – Lena Dresselhaus 2.2.2 Definition of GTM

Another key challenge in GTM is the definition and the intellectual boundaries as this is still an unresolved issue (Scullion et al., 2010). These authors propose the following definition for GTM:

“GTM includes all organizational activities for the purpose of attracting, selecting, developing, and retaining the best employees in the most strategic roles (those roles necessary to achieve organizational strategic priorities) on a global scale. GTM takes into account the differences in both organizations’ global strategic priorities and the differences across national contexts for how talent should be managed in the countries where they operate” (Scullion et al., 2010).

Michael Armstrong describes GTM in a quite similar way. To his mind, TM illustrates a company’s use of an integrated set of activities to guarantee that the organization attracts, retains, motivates and develops the talented people it needs now and in the future. The purpose is to protect the flow of talent, bearing in mind that talent is a major corporate resource (Armstrong, 2009).

David Creelman, however, defines TM in a more abstract way. As per Creelman (2004), TM is best seen as a perspective or a mindset instead of a set of topics. This perspective assumes talented employees play a central role in the success of the firm. As a consequence, all the corporate issues have to be seen from the perspective of “How will this affect our critical talent?” and “What role does talent play in this issue?” Creelman (2004) challenges managers to wear TM as a hat, or as a pair of glasses through which they should see the world. His point of view is that TM is a set of tools and technologies that help organizations make good decisions about talent.

Ashton & Morton (2005) see TM as a strategic and holistic approach to both HR and business planning or a new route to organizational effectiveness. Talent, to their mind, should be a strategic balance between performance and potential. Performance concerns both the past and the present, whereas potential embodies the future. They describe TM as the integration of different initiatives, or constructs in order to build a coherent framework of activity. Crucial components are elements of this framework: Ethos: including values and behaviour, to support the view that every employee has the potential to develop further within the company; Focus: detecting the jobs that make a difference and filling these jobs with the right people at the right time; Positioning: TM should be a management task, thus making use of a top-down approach; Structure: applying different tools, processes and techniques with defined accountability in order to get the jobs done; System:

facilitating a long-term and holistic policy to generate change (Ashton & Morton, 2005).

(22)

Page 22 Master Thesis – Lena Dresselhaus

Attraction

Strategic human resource management Organization of human resource management

Human resource planning, human resource marketing, human resource controlling

Recruiting

Appraisal

Development

Retention

Talent management as HR function and direct executive function of line manager Indirect human resourcefunction Direct human resource function TM processes

Chambers et al. (1998) reinforce the view that managers must elevate TM to an acute corporate priority. Nowadays, there is already a war for talent, and this will intensify the next years.

Jäger’s (2009) opinion is that TM is a new, overarching key process of HRM. He differentiates direct and indirect personnel functions. The indirect functions consist of strategic HRM, organisation of HRM as well as HR planning, HR marketing and HR controlling. The direct personnel function, however, is TM which can be seen as an HR function and direct executive function of the line managers. Both fields have an influence on the processes of TM. With reference to Jäger (2009), there are five different TM processes, namely attraction, recruiting, appraisal, development and retention.

As a result, it is important to understand that TM cannot be isolated from the business strategy (Guthridge et al., 2006). TM is a part of HRM strategy and therefore also a part of the business strategy. The TM strategy must align with the business strategy of a company.

Fig. 4: TM as an overarching key process of HRM (Jäger, 2009)

In order to understand TM, it is necessary to explain these five TM processes. The first step of the TM process is attraction. Considering this, the overall strategy of a company should be becoming an

(23)

Page 23 Master Thesis – Lena Dresselhaus employer of choice. In this case, a company should aim at establishing a brand image and continuously to become a popular employer of choice. According to this author, the second part, namely recruiting, involves three aspects:

1. defining requirements in form of job descriptions and specifications, deciding terms and conditions of employment,

2. attracting the candidates in form of reviewing and evaluating alternative applicants, inside and outside the company, advertising, using agencies and consultants, and

3. selecting candidates in form of sifting applications, doing interviews, estimating candidates, assessment centres and preparing contracts of employment.

The third step of the TM process is appraisal. Appraisals are closely connected with performance management. This can be described as a planned process including elements like agreement, measurement, feedback, positive reinforcement and dialog between the employer and the employees. It is a kind of systematic process to improve organizational performance by developing performances of individuals and teams. The fourth element is development. Developing talent means to ensure that people obtain and upgrade the skills and competencies they need. The final aspect of the TM processes is retention. Organizations need to keep their talented employees. Different factors influence retention and have to be considered in detail by both employer and employees: company image, recruitment, selection and deployment, leadership, learning opportunities and performance recognition and rewards (Armstrong, 2009).

To provide a useful insight into GTM, Dahm (2007) identifies five basic elements of TM. These are profile creation, discovery and address, choice and positioning, personnel development as well as loyalty and motivation.

Profile creation encompasses the definition of required competencies that optimally support the current operating procedures. Central point of this element is the profiling. This term includes the description of operating procedures due to tasks and its requirements. This profiling should not only focus on the current organizational situation, but also on innovations and changes like expansion, outsourcing etc. Because of ongoing changing requirements, it is advisable to repeat this process at least every five years (Dahm, 2007).

(24)

Page 24 Master Thesis – Lena Dresselhaus 1. Profile creation

2. Discovery and address

3. Choice and positioning

4. Personnel development

5. Loyalty and motivation

Fig. 5: Key elements of TM (Dahm, 2007)

Discovery and address comprises identifying key personnel internally and externally in order to optimally distribute the personnel over the required competencies. Operating procedures, based on core competencies, allow an objective judgement of candidates. Besides, this procedure of recruitment intends to avoid miscasts as it represents a valid initial situation. Development Dimensions, an international HR analysis centre, stresses in “Leadership Forecast 2005” that “almost half (46%) of organizations do not have a systematic process for identifying and developing candidates for leadership or management positions”. Already at this stage, TM can be discussed with the candidate by explaining the selection and decision criteria as well as following activities like the targeted staffing and the sustainable development of the employees (Dahm, 2007).

Choice and positioning implies an optimal staffing based on existing requirements and competencies.

Selection and staffing should preferably take place by making use of competence-based matching which aligns the candidate profile with the job profile. This process supports a comparison of several potentials.

Matching often includes a potential analysis in form of a personality test. An optimal staffing fulfills two

conditions: on the one side, it illustrates job satisfaction and on the other side, it ensures a fluent workflow. To achieve this, flexibility of both parties is required, especially in form of a continuous self-reflection of the employee’s acting and the continuous review with the principal (Dahm, 2007).

Personnel development deals with existing potentials geared towards obtaining demand-oriented HR development. Based on the results of matching, the company aims to develop and support potentials. In order to implement operating procedures, it is necessary to consider the individual’s learning and development requirements. A further step of this GTM element is verifiability. A possible evaluation could be feedback processes in order to exchange the employee’s and the

(25)

Page 25 Master Thesis – Lena Dresselhaus principal’s opinions (Dahm, 2007).

Loyalty and motivation represent change facilitation and the delivery of responsibility of managerial functions as far as it is desired on behalf of the company as well as on behalf of the employees.

Hierarchically organized corporations in particular hesitate to delegate responsibilities. According to the survey “HR landscapes – defining the future path of talent management 2006”, more than 50%

of the enterprises invest distinctly much more time in recruitment than in loyalty of their top performers. However, Piotr Bednarczuk, CEO of the Hewitt Associate business consultancy, argues that recruiting new employees takes much more time than retaining old employees. But even successful employees strive for new tasks and an extension of their fields of responsibility if they commit themselves to and identify themselves with the company. This can be achieved by delegating tasks including personnel and budget responsibility instead of hiring external candidates for these jobs (Dahm, 2007).

Michael Armstrong (2009) sees TM as a kind of a “bundle” that includes many interrelated processes, as shown in the following figure.

Fig. 6: The elements of TM (Armstrong, 2009)

Role

Internal resourcing

External resourcing

Talent relationship management

Performance management

Learning and development Management development Continuing talent audit

Management succession

Career management

The talent pool

Business strategy

Resourcing strategy

Attraction and retention

policies

Referenties

GERELATEERDE DOCUMENTEN

voor veel mensen een moeilijk vak kan zijn, daarom is het mooi aan deze serie dat we kunnen laten zien waar de wiskunde allemaal in verstopt zit?. Bovendien laten we ook zien

(sleuf XXXVII) Klein gedeelte van een kringgreppel welke voor de rest geheel was vergraven. (sleuf XXXVII, XXXVIII en XXXIX) Gedeelte van een

1.8 Factors affecting the potency, efficacy and agonist activity in transcriptional regulation Initially, the EC50 value for a receptor-agonist complex and the partial agonist

The data of the present investigations place particular emphasis on the behaviour of 4-kCPA during elution on SCOT OV-275 columns and implications for the selectivity

In groepen van drie gaan de deelnemers de casuïstiek die is voorbereid voor het eerste dagdeel, of andere actuele casuïstiek uitspelen. Het betreft casuïstiek waarbij de

De studie van Howland en Liederman (2013) vormt de methodische grondslag van dit onderzoek, aangezien beide modaliteiten aan de kinderen worden geleerd; in de ene conditie

Bijvoorbeeld het creëren van content hoeft niet perse het gevoel van een social netwerk te hebben want mensen zetten er iets op en krijgen daar geen like of